Emergent Research

EMERGENT RESEARCH is focused on better understanding the small business sector of the US and global economy.

Authors

The authors are Steve King and Carolyn Ockels. Steve and Carolyn are partners at Emergent Research and Senior Fellows at the Society for New Communications Research. Carolyn is leading the coworking study and Steve is a member of the project team.

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Emergent Research works with corporate, government and non-profit clients. When we reference organizations that have provided us funding in the last year we will note it.
If we mention a product or service that we received for free or other considerations, we will note it.

It has charts and data on things like the growth of data traffic, phones replacing cameras, its impact on advertising, etc.

But our favorite is it's impact on chewing gum sales.

As the article chart below shows, gum sales have declined substantially since the release of the iPhone.

The reason, according to the article, is we're now too busy looking at our phones in check-out lines to buy gum. Key article quote:

Supermarket checkout lines — strategically stocked with magazines and candy — were for a long time a major point of sale for gum. Consumers waiting on line to pay would look around and make impulse buys. Now, however, we’re so consumed with our phones that we’re not reaching for a pack of gum to stave off our boredom.

This is a great example of secondary effects and unintended consequences (we assume Steve Jobs was not targeting gum sales with the iPhone).

As the article points out there must be many more examples:

"Have drug dealing and other illegal activities become more efficient thanks to the smartphone’s discreet payment model? Has English become more prominent as English-language-based mobile apps connect the developing world? Have smartphones and the omnipresent connectedness they provide enabled the rise of helicopter parents, niche communities or better literacy."

"In spite of perceived across-the-board advantages of working as freelancers or consultants, nearly two-thirds of millennials said they prefer full-time employment. Millennials’ anxiety about world events and increasing automation may be partially responsible for them wanting to remain in their jobs, but the allure of flexible working options might be just as influential."

Our research finds the same thing, except we hear this from everyone and not just Millennials.

One of the key findings of this study is that the motivations for working independently are as much psychological and emotional as they are financial. Over the years, this study has detected a stark perceptional divergence between those who choose to work independently and those with traditional payroll jobs. Beyond having different risk profiles, they simply see the prospect of independent work—and what you can get out of it—in a different light.

Simply put, most of those with traditional jobs see independent work as too risky and unstable. Their risk profile and risk tolerance makes independent work unattractive.

However, independent workers have risk profiles that allow them to pursue and prefer independent work.

Of course independent workers would like more stability. And those with traditional jobs would like more work flexibility.

The big implication of this is as the economy shifts to more independent work, more people who don't have independent work risk profiles are going to be working independently.

This will not go well for this group unless we figure out how to improve the security and stability of independent workers.

It would also help if more companies offered flexible work options for their traditional employees.

And while few independent workers report these marketplaces are their primary source of business or income, more independents are turning them to fill gaps in their schedules, find new clients and explore new business opportunities.

In other words, independent workers are seeing online talent marketplaces as another channel for finding business.

Not surprisingly, the use of online marketplaces is correlated with the age. Younger independent workers, who tend to be more tech savvy and have less developed professional networks, use them more than older independents.

The trend towards greater use of online talent marketplaces will likely continue.

The article also covers the myriad of scandals, problems and issues Uber is facing. Key quote:

"The latest Uber headlines are straight out of a TV drama ... The facts in the stories are worse ... The stories would defy credulity if they weren’t about Uber, a company whose first half of 2017 seems better suited to fiction than reality."

But the article also points out:

"Despite all of it, there is one thing people still like about Uber: its service."

Uber's data advantage is simple. They have more data than their competitors. More data means better analytics, which means better business insights. Better insights provide competitive advantage.

Most of Uber's revenue comes from outside of the U.S., where consumers are paying even less attention than they are here.

And we're also aware they are facing talent attraction and retention issues, especially in San Francisco. But Uber still shows up on top places to work lists and they've recently made several high profile hires.

Also, as long as they offer compelling jobs - and their mission to re-engineer global transportation is very compelling - people will want to work there.

This is not to say Uber won't fail. They can and will if they don't fix their management team and bring in adult leadership.

June 13, 2017

In 2017, the total number of independent workers (self-employed, freelancers, independent contractors, etc.) in American rose to 40.9 million, up 2.8 percent from 2016.

And MBO Partners is forecasting the independent workforce will continue to grow over the next 5 years, reaching 47.6 million in 2022.

It's the 7th year MBO Partners has conducted this study, which gauges the size, growth, motivations and attitudes of independent workers. We work with MBO Partners on this study.

While the overall independent workforce continues to expand, how it's expanding is quite interesting and reflects broader cyclical and structural forces impacting the overall economy.

Looking a bit deeper at the data shows:

1. The number of full-time independent workers declined for the second straight year.

The number of full-time independents (those working as independents at least 15 hours per week in an average work week) declined by 4.1 percent to 16.2 million in 2017.

The main driver of this decline is the strong jobs market is allowing "reluctant independents" - people who work independently but would prefer a traditional job - to return to traditional employment.

In 2017 the share of full-time reluctants declined to its lowest level of 24%, down from 26% in 2016 and 34% in 2012.

In addition to reluctants returning to traditional jobs, so did some independents who are highly satisfied with independent work. Despite being highly satisfied, opportunities presented by the strong jobs market lured them back to traditional employment.

2. The number of high income independents continues to grow.

Despite the decline in full-time independents, the number of full-time independents who earned $100,000 or more increased for the sixth straight year.

In 2017, 3.2 million full time Independents reported making more than $100,000 annually, up 4.9 percent from 2016. This group has grown steadily throughout the study time frame and now represents nearly one in five full time Independents.

The tight labor market and ongoing economic expansion is enabling those whose skills are in demand to get more work, and to command a premium for their services. It's also leading to more highly skilled people to choose independent work over traditional employment.

3. The number of part-time independents also declined.

The number of part-time independents (those working as independents less than 15 ours per week in an average work week) declined to 11.8 million in 2017 from 12.4 million in 2016.

This again was largely due to the strong job market pulling people back to traditional employment.

4. The number of occasional independents continued to surge.

Occasional Independents (those working irregularly or sporadically as independents but at least once per month) soared 23% to 12.9 million, up from 10.5 million in 2016.

Stagnant wages, declining middle class jobs and rising costs (particularly for housing, education and healthcare) are resulting in more Americans supplementing their income through regular but occasional independent work.

It's clear that both cyclical and structural forces are impacting independent work.

The cyclically strong job market and the related "war for talent' are impacting the growth of the independent workforce several ways.

It's pulling some independents back to traditional work. At the same time, it's enabling independents with in-demand skills to find more work and earn more. This is making independent work more attractive to highly skilled workers.

The structural shift towards independent work is also made clear by the fact that overall independent workforce continues to grow despite an extremely strong traditional job market.

Yet despite this historically strong jobs market, more people continue to join the independent workforce.

This is due to a combination of structural factors that are leading to growing numbers of independent workers.

These include such factors as changing demographics, social shifts, organizations shifting to contingent talent, technology enabling independent work, wage stagnation, the hollowing out of middle class jobs and many others.

June 12, 2017

Maps are a popular way of displaying emerging technologies and how important they are and/or how quickly they will impact business and society.

Almost all technology analyst firms produce maps. They do this to try to display complex information in a simple, digestible form.

Traction Technology Partners, a firm that tracks and analyzes emerging technologies for enterprise clients, has created an interesting tech trends map (click to enlarge).

The map's horizontal axis is based on survey of "members of the Traction Network (mostly CIOs, CTOs, and senior IT execs in the enterprise)". They were asked to rank the importance of a wide range of technologies.

The map shows the technologies that ranked in the top 6, with cybersecurity ranking the highest in terms of importance.

They were also asked to rank the rate of adoption of these technologies on a 1 to 10 scale. This is the vertical access and cloud computing ranked the highest on this metric.

According to the map maker's Medium article the goal of this map is to:

... create a relatively small, 2-D map that a reader can grasp in 15 minutes or so, and which accomplishes the paradoxical and essential job of pulling all the emerging technologies into one map while dividing them into different and more-or-less well-defined neighborhoods.

All technology maps have their strengths and weaknesses. This one struck us as being quite useful.

“Since the 1970s, steady work that pays a predictable and living wage has become increasingly difficult to find,” said Jonathan Morduch, a director of the U.S. Financial Diaries project, an in-depth study of 235 low- and moderate-income households. “This shift has left many more families vulnerable to income volatility.”

The article points the main culprit is shifting pay and variable work hours at a growing number of traditional jobs.

... income volatility is growing and more Americans are facing financial hardships and shocks than in the past. Second, it’s clear that our traditional safety nets are not working as well as they need to.

Because of this, a growing number of Americans are turning to gig work to help them work through a financial hardship or smooth volatile income streams.

In other words, the gig economy is being used as an alternative safety net for many gig workers.

This is not to say there aren't income volatility issues with gig work. There clearly are, especially for those working full-time in the gig economy.

But for the majority of gig workers who work part-time or occasionally in the gig economy, the gig economy reduces instead of causes income volatility.

Economic uncertainty has a number of effects. It leads people to avoid long term or major commitments, both in their personal lives and as consumers.

Examples include delayed and lower rates of marriage, having children and home ownership. It also leads to a resistance to large purchases of all kinds. All of these have major impacts on the economy.

... work and personal life should be allies and that participation in multiple roles, such as parent, partner, friend, employee, can actually enhance physical and psychological well-being — especially when all of the roles are high quality and managed together.